It is hard to believe that New Zealanders chose not to pick up as much as $300 million on offer from the Government. That is the amount going begging each year through the KiwiSaver tax credit but for one reason or another New Zealanders are not saving enough to qualify for their share.

The money available could be as much as $521.43 for individuals, which is the credit for those with accounts who over 12 months put at least $1,042.86 into a fund - a bit over $20 a week.

It is not an unduly large amount, but a lot of New Zealanders cannot find the ways and means to make the contribution.

A survey last year found 35 per cent of those who had stopped contributing said they could no longer afford the investment. That confirms a lot of families struggle week to week, but also that many more are simply not connected to the scheme.

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The Financial Markets Authority estimates that at June 30 last year, some 105,785 KiwiSaver members were taking a contributions holiday. Thousands more, many self-employed, are not in any scheme.

Most of those taking a break from KiwiSaver have opted, as they can, for the maximum five-year holiday, at which point many simply roll over the arrangement.

But like any holiday, it comes at a cost, though the price is not immediately obvious because it can lie some distance in the future.

For a 25 year old pulling out of their fund for five years, the financial hit at retirement would be about $40,000, the ANZ bank estimates. The KiwiSaver member loses their employer's contribution, the tax credit and the growth over many years of their investment.

The Commission for Financial Capability wants changes to New Zealand's retirement policies and is urging an overhaul of the 'holiday' arrangement.

It suggests replacing the name 'holiday' with the term 'suspension' because it thinks the existing word is too upbeat and conveys an impression that the break is a good idea. In a related suggestion, the commission wants people taking advantage of the holiday to reapply for it every year, rather than when the five-year term expires.

That way, the commission says, KiwiSaver members will be forced to consider whether they really ought to be doing something about their retirement, instead of putting it off.

To reinforce the real cost of the 'holiday', the commission wants to ensure those skipping payments get a letter setting out exactly what they have missed out on, and how much they would have saved had they kept up their payments.

The commission's changes are a starting point in the much broader pension discussion and really amount to little more than sensible tweaks to the existing scheme.

Far more serious issues - the age of entitlement, the question of means testing, eligibility criteria for immigrants - need to be confronted in New Zealand's pension policy if state superannuation is to remain sustainable. Election year is a good time to renew the debate.